US: Dow, S&P close at record highs as Omicron worries ease

[TAOS] The Dow and S&P 500 closed at all-time highs on Wednesday (Dec 29) on a boost from retailers including Walgreens and Nike, as investors shrugged off concerns on the spreading Omicron variant.

The Dow has now risen 6 straight trading days, marking the longest streak of gains since a 7-session run from Mar 5 to Mar 15 this year.

Walgreens Boots Alliance and Nike rose 1.59 per cent and 1.42 per cent respectively against the backdrop of recent reports suggesting holiday sales were strong for US retailers.

Data on Wednesday showed the US trade deficit in goods mushroomed to the widest ever in November as imports of consumer goods shot to a record, as the coronavirus pandemic has limited spending by Americans on services.

Some early studies pointing to a reduced risk of hospitalisation in Omicron cases have eased some investors concerns over the travel disruptions and powered the S&P 500 to record highs this week.

"The market started to recognise that the Omicron variant was in a strange way good news, because it will burn itself out more rapidly because it's easily transmissible, but it's less likely to overwhelm hospitals," said Jay Hatfield, founder and chief executive of Infrastructure Capital Management in New York. Still, he said Omicron arguably is going to be a headwind for at least the next month.

Meanwhile, the S&P 1500 airlines index dipped.

Delta Air Lines and Alaska Air Group cancelled hundreds of flights again on Tuesday (Dec 28) as the daily tally of infections in the United States surged.

Three of the 11 major S&P sector indexes declined - the energy index, the consumer services sector and the financial sector.

Typically, the final 5 trading days of the year and the first 2 of the subsequent year are seasonally strong for US stocks, known as the "Santa Claus Rally". However, market participants warned against reading too much into daily moves as the holiday season tends to record some of the lowest volume turnovers that can cause exaggerated price action.

The Dow Jones Industrial Average rose 90.42 points or 0.25 per cent to 36,488.63, the S&P 500 gained 6.71 points or 0.14 per cent to 4,793.06 and the Nasdaq Composite dropped 15.51 points or 0.1 per cent to 15,766.22.

The S&P 500 dipped on Tuesday in the lowest trading volume session of 2021, snapping a 4-day winning streak.

As 2021 draws to a close, the main US stock indexes are on pace for their third straight year of stunning annual returns, boosted by historic fiscal and monetary stimulus. The S&P 500 is looking at its strongest 3-year performance since 1999.

The focus next year will shift to the US Federal Reserve's path of interest rate hikes amid a surge in prices caused by supply chain bottlenecks and a strong economic rebound.

Among other stocks, shares of Victoria's Secret & Co rose more than 12 per cent after the intimate apparel retailer announced a US$250 million accelerated share repurchase programme.

The retailer also said they had strong sales over the holidays.

Tesla's CEO Elon Musk exercised all of his options expiring next year, signaling an end to his stock sales. Its shares dropped 0.21 per cent but were still on course to end up about 54 per cent for the year.

Volume on US exchanges was 7.89 billion shares, compared with the 11.15 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 1.20-to-1 ratio; on Nasdaq, a 1.43-to-1 ratio favoured decliners.

The S&P 500 posted 76 new 52-week highs and no new lows; the Nasdaq Composite recorded 77 new highs and 374 new lows.

REUTERS